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Florida’s consumer confidence keeps rising
GAINESVILLE, Fla. – May 1, 2013 – Floridians’ consumer confidence rose three points to 79 in April – the second consecutive monthly increase, according to a new University of Florida (UF) survey.

“Many economists … expected confidence to erode in April as the effects of the federal budget cuts known as sequestration along with the expiration of the payroll tax began to unfold,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “So far, this has had virtually no impact on consumer confidence among Floridians.”

Four of the five components used to determine Florida consumer confidence level increased and one remained unchanged in April. Respondents’ overall opinion that their personal finances are better than a year ago increased five points to 70, while their expectations they will be better off financially a year from now increased six points to 78.

Meanwhile, their trust in the U.S. economy rose three points to 80. They also were optimistic about national economic conditions over the next five years – that assessment rose one point to 77.

Left unchanged from March was whether now is a good time to buy big-ticket items such as cars and appliances. The response stayed at 90.

Not all Floridians, however, are optimistic. Confidence among Floridians making $30,000 a year or less dropped six points to 61, but it rose four points to 85 for those earning more than $30,000.

Age could affect views, too. The overall confidence level of Floridians younger than 60 increased 10 points to 87, but it fell three points to 72 for those 60 and older.

“This difference may have to do with the unveiling of the Obama administration budget proposal that signaled a willingness to negotiate on aspects of Social Security and Medicare,” McCarty says. “Optimism, however, among those aged 60 and under is more likely fueled by economic improvements here in Florida.”

For example, Florida’s unemployment rate continues to drop, coming in at 7.5 percent for March, which is slightly less than the 7.6 percent national figure. Leisure and hospitality showed the biggest job growth of all Florida’s employment sectors. The construction industry also reports slow but positive growth.

Florida’s housing prices also continue to rise, with the median price now at $160,000 – the highest median price since October 2008, though it’s still 38 percent lower than the peak value of $257,800 from June 2006. In addition, mortgage rates continue to hover around historic lows.

Meanwhile, the stock market is still near record highs, bolstering retirement accounts for many Floridians, and gas prices have continued a steady slide.

Despite the encouraging trends, many economists still expect the effects of sequestration to be felt throughout the country, including Florida, but it may take months for the effects to be fully realized. Until then, “Floridians are increasingly optimistic,” McCarty says.

Conducted April 13-25, 2013, the UF study reflects the responses of 407 individuals, representing a demographic cross-section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.

IRVINE, Calif. – May 9, 2013 – RealtyTrac released its U.S. Foreclosure Market Report for April 2013 today. It finds that foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 144,790 U.S. properties in April, a decrease of 5 percent from the previous month and down 23 percent from April 2012.

Total foreclosure activity hit a 74-month low in April – at its lowest level since February 2007.

Foreclosure activity represents all homes in the foreclosure process, including those that received a first notice. The drop suggests stability.

On the other side of the coin, judicial foreclosure auctions represent homes leaving the foreclosure process in states such as Florida where they go through the court system. Nationally, judicial foreclosure auctions increased 22 percent and 31 percent year-to-year, suggesting a new push to move foreclosure inventory.

Scheduled foreclosure auctions increased from a year ago in 15 of the nation’s 26 judicial or quasi-judicial foreclosure states, including Florida, where they rose 55 percent.

On a RealtyTrac city analysis, Florida had five cities in the top 10 for foreclosure rates, including No. 2 Ocala (one in every 255 housing units had at least one foreclosure filing), No. 3 Miami (one in every 269 units), No. 4 Orlando (one in every 287 units), No. 7 Jacksonville (one in every 345 units) and No. 9 Tampa at No. 9 (one in every 384 units).

Nationally, one in every 905 U.S. housing units had a foreclosure filing during April.

“The April numbers indicate that the pig is moving through the python when it comes to deferred foreclosures in judicial foreclosure states,” says Daren Blomquist, vice president at RealtyTrac.

“Foreclosure starts have been increasing for several months in many of the judicial states, and now that increased volume is showing up in the second stage of the process: the public foreclosure auction,” he adds. “Scheduled foreclosure auctions in judicial states jumped to a 30-month high in April, evidence that lenders are serious about moving forward with completing the foreclosure process – either through repossession or sale to a third party investor at public auction.

Other report findings

• Scheduled non-judicial foreclosure auctions in states where foreclosures don’t need to go through the court system were down 7 percent in April from March and 43 percent year-to-year. These auctions were at an 88-month low – since April December 2005.

• A total of 70,133 U.S. properties started the foreclosure process in April, down 4 percent from the previous month and down 28 percent from a year ago.

• Lenders repossessed 34,997 U.S. properties in April, down 20 percent from March and down 32 percent from April 2012 to the lowest level since July 2007 – a 69-month low.

• Lender repossessions (REO) decreased from a year ago in 37 states and the District of Columbia.

• At the beginning of May, A total of 11.3 million mortgages nationwide were seriously underwater, meaning combined amount of mortgages secured by the home was at least 25 percent more than the estimated value of the home. That represented 26 percent of all outstanding mortgages, but it’s down nearly 1.5 million from the 12.8 million seriously underwater mortgages in May 2012.

NEW YORK – May 14, 2013 – Hopeful borrowers with credit scores below 620 increasingly are denied a mortgage as they struggle to meet lenders’ more stringent underwriting standards, according to Elizabeth Duke, a member of the Board of Governors for the Federal Reserve System, at a recent Housing Policy Executive Council.

From 2007 to 2012, mortgage originations for borrowers with a credit score between 620 and 680 fell nearly 90 percent, Duke said. During that time, mortgage originations fell only 30 percent for borrowers with credit scores higher than 780.

According to an April survey by the Federal Reserve, lenders are less likely to originate a mortgage for a borrower with a FICO score in the 620 range, even if the borrower has a 10 percent or 20 percent downpayment.

“The path to easier credit conditions is somewhat murky,” Duke says. “Some of the forces damping mortgage credit availability – such as capacity constraints and concerns about economic conditions or house prices – are likely to unwind through normal cyclical forces.”

In 2007, the median credit score was 730 compared to 770 in 2013, Duke said.

DELRAY BEACH, Fla. – May 16, 2013 – A RealtyTrac housing market analysis compared building permit data released by the U.S. Department of Housing (HUD) for the first quarter to foreclosure starts for the same time period. RealtyTrac looked at the national, state and city level.

“Nationwide and in most markets, it appears builders are planning to ramp up activity that will help offset a drop in foreclosure starts, but there are some markets where a jump in both building permits and foreclosure starts in the first quarter indicate the scales will tip more heavily in favor of supply of homes for sale in the coming months – both new homes and foreclosures,” says Daren Blomquist, vice president at RealtyTrac.

“On the other extreme there are some markets where both building permits and foreclosure starts are down dramatically, indicating that there will be no reprieve from the shortage of homes for sale in those markets in the near future.”

First quarter findings

• Nationwide, single-family building permits increased 27 percent from a year ago – the highest first-quarter total since 2008. Meanwhile, U.S. foreclosure starts decreased the same amount, 27 percent, to the lowest quarterly level since the second quarter of 2006.

• The majority of building permits in the first quarter were for single-family homes (64 percent of total permits), followed by 5+ unit multi-family properties (33 percent). Overall, multi-family building permits increased 23 percent from a year ago.

• States with the most single family building permits in the first quarter were Texas, Florida, North Carolina, California and Georgia, all of which posted double-digit percentage increases from a year ago.

• All these top states also posted decreasing foreclosure starts from a year ago, although Florida foreclosure starts were down just 1 percent.

• States where both single family building permits and foreclosure starts increased from a year ago included Nevada, Washington, New Jersey, Maryland and New York.

• Cities with the most single family building permits in the first quarter were Houston, Oklahoma City, Austin, El Paso and Fort Worth. Of these top five, all except for Austin posted decreasing foreclosure starts during the same time period. Austin foreclosure starts increased 19 percent.

• Cities with the most foreclosure starts in the first quarter were Miami, Las Vegas, Chicago, Fort Lauderdale and Orlando, with Las Vegas, Fort Lauderdale and Orlando posting increases in foreclosure starts from a year ago. All five cities posted increases in single-family building permits from a year ago.

• Cities where both single family building permits and foreclosure starts increased at least 10 percent from a year ago in the first quarter included Las Vegas, Seattle, Raleigh, N.C., Reno, Nevada, and Boca Raton.

• Cities where both single family building permits and foreclosure starts decreased from a year ago in the first quarter included San Antonio, Albuquerque, Fresno, Bakersfield (both in California) and Greensboro, N.C.

• RealtyTrac posted a chart of 19 U.S. cities with “the most for-sale inventory coming.” In Florida, Delray Beach ranked No. 1, with Boca Raton at No. 16 and Ocoee at No. 19.

NEW YORK – May 21, 2013 – Real estate columnist Ken Harney says that FHA officials assured him the agency is not trying to exclude hundreds or thousands of condominiums nationwide from qualifying for financing under its mortgage insurance program.

However, he says FHA’s abrupt, new “no-tolerance” stance has many condo associations wondering if that’s true.

The issue is complicated, and it revolves around language tucked away in many condo complex’s covenants, conditions, and restrictions (“CC&Rs”). While the CC&Rs may ban rentals for periods of 30 days or less, many also have a seemingly innocuous exception to that rule – one that allows units taken back via foreclosure by mortgage lenders or investors to rent the unit for 30 days or less.

Until recently, FHA showed little interest in the 30-day language. A few weeks ago, however, it started rejecting applications. According to Harney, Department of Housing and Urban Development (HUD) lawyers claim the 30-day language violates a 1994 amendment to the National Housing Act.

The Community Associations Institute has received numerous complaints from members upset by what they consider a sudden and unannounced policy shift. Harney says FHA is “aware of the problem,” but “had no choice” in taking the action.

WASHINGTON – May 22, 2013 – The shape of housing markets has changed dramatically over time, and it will change again in the face of new housing opportunities and challenges, according to panelists at the “Challenges and Opportunities in Housing and Homeownership” session Friday at the National Association of Realtors® (NAR) 2013 Midyear Legislative Meetings & Trade Expo.

“The residential mobility rate (a measure of American moving) in the U.S. has been falling steadily since the 1990s, when it was approximately 20 percent, to its current level of 12 percent,” said NAR Chief Economist Lawrence Yun. “The decline is unwelcome news since it may imply a reduction in economic mobility.
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According to Yun, “Mobility is currently being impacted by the lack of housing inventory since fewer homes are available. In the future, proposed regulations requiring larger downpayments (QRM or qualified residential mortgage rules due to be released soon) could also significantly reduce mobility since fewer homeowners may be able to afford a home.”

Lisa Sturtevant from George Mason University’s Center for Regional Analysis said recent trends in residential mobility are most likely the result of changes in the age distribution of the population. The two largest segments of the population – baby boomers and millennials – are delaying many major lifecycle events that have been traditional for their respective life stages, like marriage, children and retirement. That also means they’re not moving as much as members of previous generations at the same life stages.

“Homeownership rates have declined fastest for millennials, most likely the result of fewer job opportunities and higher student debt; however, I believe they still want to become owners and will eventually make their way into the housing market,” Sturtevant said. “When they do enter the market, they’ll care about different things than previous generations too. I foresee more single people buying smaller homes in urban areas.”

Yun agreed that the recent housing downturn hasn’t changed younger buyers’ attitudes about homeownership, despite many of them delaying their entrance into the market. “Rather, reduced home prices and lower interest rates have provided an opportunity for younger buyers to affordably enter the housing market,” he said.

“Higher home prices will unlock a large number of households with negative or low equity and incentivize them to get off the sidelines and into the housing market,” added James D. Shilling from DePaul University’s Institute for Housing Studies. “However, combined with future increases in interest rates, the net effect is likely an overall reduction in residential real estate transactions and household mobility.”

He anticipates the Federal Reserve will keep mortgage rates low through 2013 and most likely into 2014. As a result, most current homeowners will have mortgages with loan rates near record lows. But that also means they’ll think twice about selling a home with a low mortgage to buy a new home when it also comes with a higher rate mortgage.

Lucy Gorham from the Center for Community Capital at the University of North Carolina said that new mortgage regulations proposed by the federal government could also impact the future housing market if they include higher downpayments. While restrictive underwriting helps lower defaults, it keeps more creditworthy borrowers from buying a home. If 20 percent downpayments are required, for example, up to 60 percent of current buyers could fall outside the qualified mortgage criteria and potentially face higher interest rates or fees.

“Despite the recent housing crisis, homeownership continues to help build wealth for lower to middle-income households,” said Gorman “A safe mortgage product with good underwriting helps lower loan defaults; requiring greater down payments simply closes off access to a greater percentage of borrowers.”

Gorham said higher downpayments would also disproportionately impact minorities. Minority families tend to have lower wealth and a greater need for access to mainstream sustainable loan products.

Margaret McFarland, Colvin Institute of Real Estate Development at the University of Maryland agreed that requiring higher downpayments and credit scores excludes many well performing loans from the market.

“Federal Housing Administration loans are an important financing option for affordable homeownership,” she said. “Veterans Affairs home loans also perform very well in relation to other mortgage products, even with a zero downpayment.”

MIAMI – May 20, 2013 – House hunters looking to buy a foreclosure in South Florida often discover they are getting outflanked by the pros: investors wielding cash.

“If you don’t have cash, or you’re looking for financing, you can’t play in the distressed arena,’’ said Doug DeWitt, owner and broker at Concierge Real Estate Services in Miami Beach, who markets bank-owned properties for some major lenders.

When a bank-owned house in the Hammocks in West Kendall went on the market in late April, the 3-bedroom, 2-bath villa drew 29 purchase offers and 60 showings over a 10-day listing period mandated by the bank. The asking price was $159,900.

The lender narrowed the field to the all-cash buyers, who were told to make their highest and best offer, and the house is now under contract.

“It went for well above asking price. They all do,’’ said DeWitt, who is the listing agent. “I have one happy buyer and 28 people I sent on their way.’’

DeWitt said he feels sorry for the first-time buyers and other house hunters looking simply to finance the purchase of a home they plan to live in.

“The banks need to move these properties. The cash offers weren’t low, they were right in line,’’ DeWitt said. “If you can take the [uncertainties of] the appraisal and inspection out of the parameters, your chance of closing goes up substantially.’’

To be sure, homebuyers still can ferret out opportunities to purchase distressed properties. Fannie Mae, for instance, offers financing with low downpayments and no mortgage-insurance requirement on select Fannie Mae-owned homes under its HomePath mortgage program.

“On some of Fannie Mae’s foreclosed properties, Fannie Mae is putting them back on the market and offering up to 97 percent financing,’’ said Ray Barkett, regional vice president and district sales manager at Keyes Realtors in Fort Lauderdale.

One of the top worries during the real estate crash was that the housing market would take another nosedive when lenders dumped a slew of distressed properties on the market. So far, that simply hasn’t come true. Lenders have managed the flow of properties onto the market. Indeed, many real estate agents are clamoring for more such inventory in South Florida, where the inventory of homes and condos for sale has plunged to its lowest level since 2005.

“There is definitely an increase in REO [bank-owned] inventory,’’ said Dewitt, “but the whole theory of shadow inventory dragging down the market has proven completely false.’’

Victor Gonzalez, a Miami real estate investor who bids on foreclosures at Miami-Dade county’s cash-only online courthouse auctions, said banks have gotten more aggressive in bidding on properties they have foreclosed on, rather than letting them go at discounts.

Even in auctions where lenders don’t take back properties themselves, competition is keen from institutional buyers like hedge funds and investor groups created to snap up distressed properties, Gonzalez said.

And the process is fraught with uncertainty. Scheduled auctions of homes often get cancelled at the last minute for a host of reasons, such as a lender’s decision to go with a short sale.

Those bidding at auctions need to know how to search records for liens. Even so, they can’t be sure how much is due in homeowners’ association or condominium fees. “I research 20 or 30 properties before bidding on one,’’ Gonzalez said.

SAN DIEGO – May 22, 2013 – If current immigration legislation in the U.S. Congress passes – bills that would create a path to legalization for 11 million undocumented immigrants – it would pump more than $500 billion into the U.S. economy over five years, according to a study released by the National Association of Hispanic Real Estate Professionals (NAHREP).

NAHREP estimates that immigration reform, as proposed, would create a new pool of 3 million homeowners and add more than $500 billion in sales, income and spending into the U.S. housing economy.

Based on previous estimates, NAHREP officials calculate that up to 6 million undocumented immigrants would likely pursue legalization and possibly citizenship under the bill, and up to 3 million would pursue homeownership based on the patterns of naturalized Latinos.

“Foreign-born householders have a high value and strong desire for homeownership,” says Juan Martinez, NAHREP president.

NAHREP based its projections on updated data and the approach it used for its 2004 study “The Potential for Homeownership Among Undocumented Workers,” to estimate the economic impact on the current housing economy.

• Assuming past purchase trends among foreign-born householders remain consistent, half expected to pursue legalization – up to 3 million of 6 million undocumented immigrants – would also buy a home once they have legal status.

• Many of undocumented foreign-born householders have age and income characteristics associated with potential homeownership, with household incomes of about $40,000.

• Up to 3 million undocumented foreign-born householders could potentially afford a home worth $173,600, the national median sales price. This would generate more than $500 billion in new mortgages, and about $25 billion in mortgage origination and refinance income.

• The purchases would create $28 billion in income within the real estate community.

• Home purchases by 3 million legitimized immigrants would create $180 billion in additional consumer spending within local communities based on the average $60,000 in associated purchases estimated by the National Association of Realtors in 2012.

“With the possibility of a legitimate path to residency and citizenship, we expect this group to be eager to buy homes,” says Gary Acosta, NAHREP co-founder.

TALLAHASSEE, Fla. – May 22, 2013 – Floridians have received about $8.7 billion in relief under the national mortgage settlement, as reported by the five largest mortgage servicing banks that are parties to the settlement.

According to the latest Settlement Monitor’s report released yesterday, more than 111,000 Floridians have received some type of relief. About $1.39 billion went to mortgage modifications; about $3.15 billion went toward forgiving the entire balance of second liens.

Overall, the average recipient receiving a mortgage modification got $133,560. The average recipient with a second-lien cancellation saw $68,333 removed.

Five banks participated in the settlement, with their numbers confirmed by the Monitor in an independent audit. The five banks include Ally/GMAC, Bank of America. Citi. JPMorgan Chase and Wells Fargo.

“Today’s report indicates that 111,000 Floridians have benefited from $9 billion in relief – significantly more than the $8.4 billion that we expected when we entered the settlement,” says Florida Attorney General Pam Bondi.

Nationally, the five lenders have distributed $50.63 billion in direct relief to over 620,000 homeowners, at roughly $81,000 per homeowner.

A chart detailing the Florida money distribution by type of consumer and bank is available online in PDF format.